ADF to remain unchanged at Mumbai airport

Last updated on: December 23, 2012 11:39 IST

ADF to remain unchanged at Mumbai airport

BS Reporters in Mumbai

The government's efforts to make air travel cheaper for passengers has received a jolt with the Airport Economic Regulatory Authority (Aera) rejecting the suggestion that the airport development fee (ADF) at the Mumbai airport be reduced and the period for its collection be extended.

Aera kept the fee unchanged at Rs 100 for domestic and Rs 600 for international flyers while setting the collection period until April 2021.

The GVK Group-run Mumbai International Airport Ltd (MIAL) had sought approval to collect Rs 200 and Rs 1,300 from domestic and international passengers, respectively, for five years. Aera has rejected this proposal.

The regulator has approved that a total of Rs 3,400 crore (Rs 34 billion) could be collected through ADF. This includes the Rs 750 crore (Rs 7.5 billion) already collected from passengers since 2009.

Civil Aviation Minister Ajit Singh said: "We were facing more complaints on fares from Delhi than Mumbai. Also, Mumbai passengers will already be paying Rs 100 and Rs 600 as ADF, against MIAL's demand of Rs 200 and Rs 1,300. With the recovery period being eight years, I am sure it will be relief for passengers."

An Aera statement yesterday said: "The Authority gave a careful consideration to the question of further reducing the rate of ADF. It was found that the recovery period would extend to April 2021 at the current rate. The Authority took a view that any extension of time period beyond April 2021 on account of reduction in ADF would not be appropriate." It added that Aera apprised the civil aviation ministry of its view and the ministry indicated it was in agreement with the regulator on the issue.

At present, passengers are charged ADF, which is part of viability-gap funding, and user development fee, which is collected to meet operational expenses. To lower the cost of air travel, the ministry had proposed the that ADF be done away with at the Mumbai and Delhi airports from January.